Are hyper-entrepreneurs and product factories replacing venture capital?

Ben Barren has a great post regarding the balancing act that is involved in building a high growth company and raising/managing venture funding. He moves on to talk about some of the stuff I’ve been banging on about, here and here …what he calls product factories…I call them sandboxes –

Product factories like Obvious Corp and Charles River’s QuickStart are smack bang in the middle of the business of business and the business of raising capital. And instead of one venture, they aim to expand anything from 2-20 businesses in a quick period of time: each with their own infrastructure, scaling, revenue models and customer orientations.

I disagree with the premise that within a sandbox one needs to have separate infrastructure for each product, but let’s let Ben continue…

That’s a lot of complexity to optimise. With the punt being that back end consolidation and scale will assist rather than hinder new venture success.

The best line from his post is this one:

Product factories are kinda like an Indie Art House Film Division (with Obvious Corp playing Miramax circa 90’s and Charles River more a Fox Searchlight).

In my view product factories, sandboxes and hyper-entrepreneurs are changing the game. Venture capitalists are traditionally slow to adapt, but Charles Rivers has shown that some of them are sufficiently fleet of foot to ensure that hyper-entrepreneurs and product factories are an addition, not a replacement to venture capital.


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